Beef and Pork Cutout
Boxed Beef Cutout
Packers who harvest over 125,000 head per year are required to report their daily sales to the USDA twice per day. This covers 90% of boxed beef volume. All primals, subprimals, cut items, ground beef, trimmings and boneless processing beef must be reported in both sales price and volume sold for each order. Each sale includes destination, sales type (negotiated or formula), delivery period (0-21 days, 22-60 days, 60-90 days, and 90 plus days), refrigeration (fresh, frozen, aged), class (steer/heifer, cow, bull, dairy breed, etc.), classification (Prime, Choice, Select, etc.), unbranded or branded (upper 2/3 Choice, Lower 1/3Choice, Select), specific item or cut, quantity sold in pounds, and FOB plant price in dollars per hundredweight.
Negotiated Boxed Beef Prices are destination (domestic only), sales type (negotiated only), delivery period (0-12 days), refrigeration (fresh only), class (native steer/heifer only except for 50/50 trimmings), classification (Choice or Select), and no branded cuts. Our website uses ONLY the Negotiated Boxed Beef Price List.
The Boxed Beef Cutout utilizes only the Primal Cuts of the carcass. These cuts have all the fat, bone, and sinew attached. From the cuts all the subprimal cuts are made which yields the ground beef, 50/50 trim, and excess fat. These Primals are Chuck, Rib, Loin, Round, Brisket, Short Plate, and Flank. These prices are calculated on a 2-day weighted average.
The cutout is a quick tool to help you see what is going on in the boxed beef market, is it up or down or level. If there is a change, look at the primals and see which one is moving and in what direction. This will give you an indication of which area of the animal is in demand, price increasing, and which is showing a decrease in interest, going down.
Pork Cutout
The pork cutout is similar to the beef cutout but is massively more complex to calculate. The pork cutout used to be calculated using only the major primal cuts of butt, loin, ham, spareribs, picnic, and belly. Again, these are the basic divisions of the animal with all associated bone, fat, trim and sinew attached. However, the USDA decided to include the jowl, neckbones, tails, front feet and hind feet in the formula in 2016. They also do a weighted average of the number of carcasses sold whole and the amount sold in subprimals. The USDA surveys the packers in July of each year for their yields and then updates those yields the following January if needed.
For our example, we will use the example from “A User’s Guide to USDA Pork Cutout” which can be viewed at https://www.ams.usda.gov/publications/content/lmr-pork-carcass-cutout
As in the Beef Cutout, prices are sent to the USDA twice daily from all producers who harvest 100,000 or more barrows and gilts or 200,000 sows and boars per year. These prices are for an average 215 lb. carcass, .55″ to .70″ fat at the last rib, and 52% – 56% lean.
